HBC chairman weighing raising offer, sources say

NEW YORK/MONTREAL Hudson’s Bay Co. chairman Richard Baker and his partners have approached minority shareholders, including Catalyst Capital Group, about potentially raising their offer to take the Canadian retailer private, according to people familiar with the matter.

Baker and a group of allies have floated the idea of raising their offer to about $11 a share from $10.30 a share, roughly the same price Catalyst Capital offered for the owner of Saks Fifth Avenue in November, said the people who asked not to be identified because the matter is private.

Report ... said the parties could reach a deal within 48 hours.

The Baker group collectively own a 57-per-cent stake in Hudson’s Bay, but likely needs a majority of minority shareholders for a deal to go through. There are no substantive conversations ongoing between Catalyst and the Baker group at this time, the people said. Catalyst remains concerned about the Baker group’s ability to proceed with a transaction after several issues were raised by the Ontario Securities Commission last month about its bid, one of the people said.

Catalyst, which owns a 17.5-per-cent stake in the retailer, remains a substantial hurdle for the controlling shareholders to overcome. The Toronto-based firm’s stake amounts to about 32 per cent of the minority shareholder votes.

Shares in Hudson’s Bay rose as much as 24 per cent on Tuesday.

An earlier report from Women’s Wear Daily said the parties could reach a deal within 48 hours.

The stock closed Tuesday at $9.88, up 21 per cent in Toronto. Bloomberg